Digitalization of Oil and Gas Industry – What the Future Holds
The oil and gas industry has faced rapid changes in the past 50 years. Due to the high consumption of energy resources and price sensitive market, organizations are finding new ways to reduce their operating costs. Initially, the fight was to explore new oil and gas reservoirs, then it boiled down to using renewable energy, and finally, it has come to the digitization of the oil and gas sector.
Organizations are looking for cutting-edge hardware and software technology to make the best use of available data. This helps them reduce costs in many different areas, including oil and gas exploration and plant maintenance.
What does digitization mean in the oil and gas industry?
Energy companies have been quite reluctant in the past to re-invent the wheel in the oil and gas industry. They usually want to implement methods that have already been tried and tested by others. This has led industry leaders to make little use of available data. However, the trend is changing and early adopters of data-driven technologies have realized great benefits in this business.
Companies are now placing remote sensors at hard to reach locations like the bottom of the ocean or polar caps. This allows them to monitor the health of their equipment through constantly transmitted data from these sensors.
Digitization not only encompasses data gathering, but it also includes manipulation of that data to gain useful insights about a company’s assets. Latest data management software allows organizations to prepare virtual images of their equipment to pinpoint where the actual problem lies.
Benefits of Digitization
Research reports suggest that the average cost of unplanned downtimes in oil and gas exploration in off-shore projects can reach up to $90 million on an annual basis. Using digital technology, companies have been able to reduce this cost by nearly 20%.
Another important benefit of making excessive use of data and information technology in the energy sector is that it allows companies to reduce their overall operating costs by up to 5%.
As the production efficiency increases, oil and gas companies in upstream as well as downstream segments are able to reduce their overall cost of production. This lowers the fuel prices and helps organizations gain a competitive edge over their peers.
What the future holds?
Digitization has allowed companies in energy sectors to employ some of the most advanced software and hardware technology in their business model. A large amount of data that is gathered from different resources allows organizations to make effective use of IoT and artificial intelligence.
The combination of all these business-optimizing techniques will give rise to energy explorers that will generate minimum waste and maximize all their assets to full capacity.
Early adopters of digital technology have managed to develop a loyal customer base in this competitive market. The next big challenge in digitizing the oil and gas industry is to set standards and enact regulations so that organizations have a digitization guideline that they can follow. This will help companies provide the best possible service to their clients at thelowest possible price